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What are your rights if you are offered unpaid leave?

Lydia Smith
Writer, Yahoo Finance UK
General view of the south City of Londons Skyline on March 16, 2020 in London, England. (Photo by Alberto Pezzali/NurPhoto via Getty Images)

The budget airline EasyJet has asked pilots and cabin crew to agree to changes in their terms and conditions, as part of its response to the coronavirus outbreak. Among the proposed changes are a freeze on planned pay rises and a requirement to take three months of unpaid leave. 

The airline isn’t the only one to bring in stringent measures because of the coronavirus pandemic. Virgin Atlantic has asked its crew to accept taking eight weeks of unpaid leave over the next four months - and British Airways has warned it will be cutting jobs. 

Other companies have also asked their staff to take unpaid leave too, including the retailer New Look. The company has offered its workforce the option of unpaid voluntary leave, voluntary reduced hours or the chance to use their holiday allowance for the foreseeable future.

Read more: How to ask your boss if you can work from home to stay safe

So what does it mean to be offered unpaid leave - and what are your rights? 

What is unpaid leave? 

Your employer can ask you to stay at home, cut your hours, or take unpaid leave if there is not enough work for you. 

If you’ve been continuously employed for one month, not refused work and not been laid off because of industrial action, you’re entitled to statutory lay-off pay. 

There’s no limit on how long you can be laid off or have your hours reduced for but you could apply for redundancy if you receive less than half a week’s pay for four weeks in a row or six weeks out of work in a 13-week period. 

Slater and Gordon employment lawyer Rubel Bashir explains: “If you are an employee, there is an obligation on the employer to offer you hours of work and an obligation on the employee to accept the work. If work hours are not available then the employer would be obliged to pay you. 

Read more: How to negotiate severance pay successfully

“Sometimes an employer may seek to lay off staff for a period of time. In order to do so, there should be a clause in the employment contract. If there is no such clause, the employer cannot do this without the employee’s agreement. However they may instead seek other steps, such as making employees redundant. 

“The pay a person is entitled to when laid off is minimal, although this is guaranteed. The maximum is £29 per day for five days in a three month period.” 

Anyone facing this situation should check their employment contract to see if there are provisions which allow the employer to do this, Bashir says. “Even if there is not a person should consider whether this is the best short term solution as work may pick up,” he adds. 

“The UK government has also introduced the coronavirus Employee Retention Scheme which allows employers to put staff on temporary leave or ‘furlough’. The employer can claim back up to 80 per cent of the wages from the HMRC. An employee could also ask their employer to top up the difference, but they are not obliged to do so.” 

What are ‘furloughed’ employees? 

Under the Coronavirus Job Retention Scheme, all employers in the UK will be able to access support to continue paying part of employees’ salaries who would otherwise have been made redundant during the ongoing health crisis. 

Furloughed workers are those whose employers cannot cover staff costs due to coronavirus. Therefore, they have been asked to stop working but they have not been made redundant. 

These employers are now able to access support to continue paying part of their employee’s wages to avoid having to make redundancies.

To access the scheme, employers need to designate affected employees as ‘furloughed workers’ and notify employees of this change.

To qualify for this scheme, you should not undertake work for your employer while you are furloughed, gov.uk states.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.